As libraries find themselves on the front lines of the culture wars—dealing with ongoing book bans and challenges across the US—another pressing issue continues in the background: the cost of digital book licensing. Few patrons are aware of what libraries pay for licensing or that those licenses expire, and some librarians say the situation is worse now than it ever was. And the surprising thing? Publishers don’t have clarity on what’s happening either.
That was the motivating force underlying IndieLib 2024, where independent book publishers and librarians came together in Columbus, Ohio, for the first of what will hopefully be many more conversations. During her introductory remarks to the conference, planning chair Claire Kelley—who works as marketing director at Seven Stories Press—said bluntly, “I don’t know which libraries are buying my books at Seven Stories.” Such information would obviously be helpful to inform her library marketing strategy so she could explore different types of library licenses. “I don’t want to just rely on distributors,” she said. “I’m not alone in my frustrations.” (The biggest library distributor is OverDrive, believed to control about 90 percent of the digital lending market.)
“Publishers keep getting told their interests are in opposition to libraries’ interests,” said keynote speaker Rebecca Giblin, co-author of Chokepoint Capitalism. It’s well known that Amazon has told publishers they shouldn’t license their ebooks to libraries because it’s cannibalizing their sales. But publishers lack visibility into the library market, said Giblin, plus they know Amazon is not exactly on their side. (As a somewhat cynical aside, Giblin suggested that, in an ideal world for Amazon, the economically disadvantaged would simply be given vouchers for Kindle Unlimited.)
These days, most digital lending licenses from big publishers are the “exploding” type. That means the book expires and is unavailable from the library after a predetermined amount of time, typically one or two years, unless it first hits the lending maximum (26 or 52 lends). For bestselling books, the cost of a license can easily run to $80. When Giblin conducted a library survey, asking how libraries decide what digital books to add to their collections, they said they must choose books they are confident will circulate, given the nature of exploding licenses. Of course, this creates a vicious cycle in which the bigger publishers with the bigger marketing budgets more easily sell their digital licenses, and at a higher price, because there is existing demand for them. Increasingly, Giblin said, libraries find themselves obliged to form large consortiums to survive in an ecosystem dominated by a few players and unfriendly licensing terms.
But do exploding licenses make sense for older titles? Giblin had an opportunity to study licensing terms on more than 100,000 books available through OverDrive. While older titles do have less demand, she said, “What we found was that publishers were pricing and licensing their older books on the same kind of terms as their newer ones.” Giblin said that some of this is simply driven by the fears of publishers who don’t know who’s licensing their books or where and how much they’re circulating. (The Panorama Project, launched years ago, attempted to address part of this issue, but it has since gone dormant.)
Giblin recently conducted a publishing experiment in the Australian market. (Giblin is an Australian and resides there.) She established a publishing house, republished more than 160 culturally important books that were unavailable in digital format, and launched them on a single day into the library market and commercial market. (Yes, permission was granted; authors get paid.) There was no evidence of sales cannibalization. In fact, when subtracting the most popular authors from the mix, it was actually the opposite: Sales increased when the books were made available and promoted by libraries. She did warn, however, that publishers must be careful with popular or bestselling books when it comes to simultaneous digital checkouts, because that is indeed a scenario that can depress sales. (Exploding licenses and perpetual licenses allow for only one patron to check out a book at a time; a simultaneous license allows simultaneous checkouts by patrons, which can mean easier and more immediate access, although the number of total checkouts may still be capped.)
Other takeaways from IndieLib 2024
- How libraries make purchasing decisions: Broadly, they look at trade reviews (e.g., Library Journal, Publishers Weekly), focus on buying from publishers they trust, and consider patron requests. Libraries also welcome and encourage direct marketing emails from publishers. Correct and extensive metadata is critical for librarians: correct BISAC codes, clearly identified subject matter, accurate audience age, complete biographical data about the author, and so on. One librarian said if she’s looking for something off the beaten path, she will go to Edelweiss. Because of budgetary planning, it’s important that print books be in stock at the quantity required by the library. If the library is concerned about getting books by their budget deadline, they will choose another title.
- How libraries make their budget go further: A librarian from Rhode Island said they agreed as a statewide library system to create a cap on what they’ll pay for an ebook license that lasts 2 years (or 52 lends): $79.99. Moreover, that library system will buy another license for such an expensive ebook only if the hold ratio reaches 30:1. That means 30 people must be waiting to check it out before the library will consider buying another license. However, for ebooks they consider reasonable in price, the library will obtain another copy when the hold ratio is lower. (They have a tiered system of hold ratios—starting at 1:1 and topping off at 30:1—that they apply based on various considerations.) Another librarian said they don’t mind spending more money on licenses if they’re perpetual (non-expiring), since the title won’t go “missing” from their collection in the future.
Bottom line: Emphasized by nearly everyone throughout the day: It’s a trap to accept the publishers-versus-libraries dichotomy. While OverDrive wasn’t in the room to defend itself (at least not that we could see), it was generally considered benign, even if sometimes an active barrier to closer relationships between libraries and publishers. (Aside from dominating distribution, OverDrive owns the digital lending infrastructure via the Libby app, among other entities.) Giblin was critical of the current system while being careful to point out that OverDrive is not evil; it’s simply the logical result of capitalism and OverDrive’s strong profit imperative. Note that OverDrive is owned by private equity firm KKR (which also owns Simon & Schuster).
Michael Reynolds, the editor in chief of Europa Editions, commented during the latter part of the program, “The most effective way to write a love story is to keep the lovers far apart for as long as possible. This [event] is the start of a beautiful love story. … Our distributors are extremely important partners for us. But they will benefit, we will definitely benefit, and you [libraries] will benefit if there are more occasions for us to speak together and understand one another.”
Further reading from past issues
- Legal Battle Sheds (Some) Light on Libraries and Digital Lending
- As Library Collections Move Digital, What Happens to Author Earnings?
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
